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shimin

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American expatriate graduate student. Interests include computation (duh?), linguistics, and physical modelling.

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From the article, Turkish currency is increasing in value relative to the dollar, but is flat relative to the Euro. Why is that?

If it is because Turkey is increasing exports to the US, then this would indeed be "currency warfare", holding the lira down so as to maintain exports. But from a quick search, Turkey is rapidly increasing its exports to "developing nations," not to the US.

So it would seem as though the cause of the exchange rate increase is that dollar-laden speculators are suddenly investing heavily in Turkish markets (or merely Turkish currency). By buying back dollars, the Turkish government is curbing this speculation, and placing themselves in a position to profit if the speculation suddenly stops. (Albeit by selling dollars, which could be considered an aggressive move.)

From the information I have, it looks like Turkey is merely defending its currency/economy, and this sort of article may very well be a piece of propaganda meant to shame Turkey into not defending its currency.

But my information may be off, and I don't actually know much about currency markets. I'd welcome a better, more enlightening explanation.